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Dec 05, 2018 06:47 PM IST | Source: Moneycontrol.com

RBI Policy Highlights: MPC may look at a prolonged pause on repo rates in FY19

MPC kept repo rates unchanged at 6.5 percent, maintaining the stance at calibrated tightening

  • Dec 05, 06:47 PM (IST)

    Thanks for staying tuned with Moneycontrol's coverage on the fifth bi-monthly monetary policy. For more updates log on to Moneycontrol.com

  • Dec 05, 06:31 PM (IST)

    Shubhada Rao, Group President & Chief Economist, Yes Bank said that basis the recent downward momentum in food prices, sharp correction in crude oil prices, and stability in rupee, the RBI now projects CPI inflation between 2.7-4.2 percent until H2FY20, which happens to be close to the mandated target of 4 percent. Rao said that this could warrant a prolonged pause on monetary policy rate amidst some upside risks.

  • Dec 05, 06:07 PM (IST)

    Sanjay Chamria, VC & MD, Magma Fincorp said that while they have been anticipating some relaxation in terms of liquidity measures to improve the flow of funds, it has not come through. Chamria said that the need of the hour is to facilitate the flow of funds to the NBFCs and HFCs so that the informal segment of customers and the MSME sector get the much needed funds.

  • Dec 05, 05:33 PM (IST)

    Rajnish Kumar, Chairman, SBI said that the RBI decision to keep rates on hold was more in consonance with market expectations but the policy guidance was a pleasant and pragmatic surprise. He said that the significant downward revision in inflation projections and assurance of continued durable liquidity was most reassuring to market participants in terms of a stable and predictable interest rate structure. 

  • Dec 05, 05:29 PM (IST)

    Zarin Daruwala, CEO, India, Standard Chartered Bank said that while the MPC maintained its stance of calibrated tightening, it was heartening to note that it was ready to ease monetary policy to support the economy. She said that the sharp reduction in the inflation forecast accompanied by planned SLR cuts should result in lower costs for borrowers.

  • Dec 05, 05:26 PM (IST)


    B Prasanna, Head- Global Markets Group, ICICI Bank said that they believe the MPC is likely to remain on a prolonged pause. He said that this also gives them the confidence that the scope for a cut in rates becomes possible if realised inflation in the next few months were to confirm or undershoot the revised path forecasted by the MPC. 

  • Dec 05, 05:03 PM (IST)

    As part of the ongoing efforts at rationalising multiple regulations framed over a period of time under FEMA, RBI will consolidate the regulations governing all types of borrowing and lending transactions between a person resident in India and a person resident outside India in both foreign currency and INR.

  • Dec 05, 04:59 PM (IST)

    CARE Ratings said that if the inflation moderates further there is a case for rate cut and the stance of the monetary policy can be changed to neutral. They are also expecting that the G-Sec yields will be in the region of 7.5 percent.

  • Dec 05, 04:53 PM (IST)

    Dinabandhu Mohapatra, MD & CEO, Bank of India said that the recent fall in crude oil prices and softening inflation numbers have enabled RBI in opting for a status quo this time.

  • Dec 05, 04:42 PM (IST)

    R K Gurumurthy, Head Treasury, Lakshmi Vilas Bank said that bonds have rallied on the back of announcement that open market operations will continue, and future policy and rate stance will depend on incoming data--implying a longer pause is the way forward.

  • Dec 05, 04:38 PM (IST)

    Available data suggest that the effect of revision in minimum support prices (MSPs) announced in July on prices has been subdued so far. However, uncertainty continues about the exact impact of MSP on inflation, going forward.

  • Dec 05, 04:37 PM (IST)

    The minutes of the MPC’s meeting will be published by December 19.

  • Dec 05, 04:34 PM (IST)

    Naresh Takkar, MD & Group CEO, ICRA said that the announcement of continued open market operations to inject liquidity would complement the impact of the recent decline in the US 10-year yield and some stabilisation in crude oil prices at a moderate level. Takkar expects the 10-year G-sec yield to trade in a band of 7.3-7.7 percent in the remainder of this quarter. 

  • Dec 05, 04:29 PM (IST)

    RBI says that credit offtake from the banking sector has continued to strengthen even as global financial conditions have tightened. It says FDI flows could also increase with the improving prospects of the external sector.

  • Dec 05, 04:26 PM (IST)

    VK Sharma, Head PCG & Capital Markets Group, HDFC Securities said that as expected, the monetary policy committee today kept the benchmark repo rate  unchanged at 6.50 percent. But he said that many economists were expecting RBI to change its stance to dovish from hawkish.

  • Dec 05, 04:21 PM (IST)

    RBI says that portfolio flows turned positive in November on account of a sharp decline in oil prices, indications of a less hawkish stance by the US Fed and a softer US dollar. 

  • Dec 05, 04:19 PM (IST)

    RBI will issue final guidelines on mandatory loan component in working capital finance.

  • Dec 05, 04:16 PM (IST)

    Liquidity needs arising from the growth in currency and the Reserve Bank’s forex operations were met through a mixture of tools based on an assessment of the evolving liquidity conditions, said RBI.

  • Dec 05, 04:11 PM (IST)

    Shishir Baijal, Chairman & Managing Director, Knight Frank India said that the status quo is on expected lines and will be a relief for the real estate industry that has been worried over a possible rate hike adversely impacting the market. 

  • Dec 05, 04:09 PM (IST)

    On the new benchmark for retail and SME loans, RBI said that banks must adopt a uniform external benchmark within a loan category.

  • Dec 05, 04:04 PM (IST)

    Ankur Dhawan, Chief Investment Officer, PropTiger.com said that the increase in repo rate at this point of time would have been a very bad news for real estate industry which is already going through fund constraints due to the NBFC liquidity issue. Dhawan said that the industry was hoping for a rate cut to revive the market.

  • Dec 05, 03:59 PM (IST)

    RBI says that India’s merchandise exports rebounded in October 2018, driven mainly by petroleum products, engineering goods, chemicals, electronics, readymade garments, and gems and jewellery.

  • Dec 05, 03:57 PM (IST)

    RBI cautions that fiscal slippages, if any, at the centre/state levels, will influence the inflation outlook, heighten market volatility and crowd-out private investment.

  • Dec 05, 03:56 PM (IST)

    MPC says that the medium-term outlook for crude oil prices is still uncertain due to global demand conditions, geo-political tensions and decision of OPEC which could impinge on supplies.

  • Dec 05, 03:51 PM (IST)

    At the close of market hours, the Sensex was down 249.90 points or 0.69 percent at 35884.41, while the Nifty was lower by 80.20 points or 0.74 percent at 10789.30.

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